History, roaring 20s, key issue 3

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  • Created by: Jessica
  • Created on: 06-06-12 13:34

Weaknesses in the american economy

  • overproduction: once goods were bought, the demand for them fell. factors produced fewer goods therefore they reduced their workforce. meaning less people could afford to buy goods
  • unequal distribution of wealth: 60% americans lived below poverty line. earning less than $2000
  • tariff policy: tariffs protected US goods but europeans put tariffs on american goods so they were not selling goods abroad
  • financial speculation: speculation is making money from borrowed money. shares were bought 'on the margin'  pay 10% of own money then borrow 90% from the bank, sell the shares pay the bank off and make a profit. in the 20's it was a bull market. this…

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